/ / / How to Teach Financial Literacy to a Teenager (+ Expense Tracker Printable)
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How to Teach Financial Literacy to a Teenager (+ Expense Tracker Printable)

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I think it hits you that your child is growing older when someone asks you how old she is, and when you share her age, they respond, “Wow! She’s in high school!!” 

As a parent, you know there are certain skills you want your child to develop before they go off to college.

Yes, those practical life skills.

What is considered a life skill?

A life skill is any skill that is needed to manage the challenges and activities of everyday, effectively.

My husband insists there is one life skill all three of our kids should master. 

The life skill of Financial Literacy.

financial literacy quote

WHAT IS FINANCIAL LITERACY?

To put it simply, financial literacy is knowing how to manage money. 

FINANCIAL LITERACY IS THE ABILITY TO USE KNOWLEDGE AND SKILLS TO MANAGE FINANCIAL RESOURCES EFFECTIVELY FOR A LIFETIME OF FINANCIAL WELL-BEING.

So the question arises, how do I teach this to my teenager?

What are the important principles she should remember, always?

Thank you DiversyFund for sponsoring this post. It’s never too early to learn about investing for your future!

Financial Literacy

This will help:

HOW TO TEACH FINANCIAL LITERACY TO A TEENAGER

If your teen remembers these principles, she will be on the road to developing a sound money management habit.

It begins with budgeting and segmenting the money she receives every month. 

Encourage her to start doing this even before she starts earning her own money.

Practice with her pocket money.

Financial Literacy

Discuss together what percentages will work best while budgeting for the month.

1. SET ASIDE MONEY TO SAVE.

This is money that should not be touched, no matter what. 

Money that will be saved for college. 

Or later on in life, for a car, a house. 

All those important, big investments. 

If your teen is like my book lover, you will need to remind her that books, though great, are not considered an important investment. 

Financial Literacy

2. SET ASIDE MONEY FOR EXPENSES

There are monthly expenses that are set but then there are expenses that crop up unannounced.

Set apart an amount that includes the required monthly expenses and a buffer for those unexpected incidentals.

Encourage your teen to always document every expense, irrespective of how tiny it may be.

There are hundreds of free apps out there, 

but nothing beats pen and paper. 

Click to print this free Expense Tracker Printable. (3 color options available.), or click on the image below

Expense Tracker Printable

 

3. SET ASIDE MONEY TO INVEST

Investing money in stocks and shares is a popular choice, but it does not come without a great amount of risk.

When your teen turns 18, though, she has the option of investing in DiversyFund.

With a minimum investment of only $500 and no management fees, DiversyFund makes it possible for you to diversify your portfolio with one of the most proven profitable forms of alternative asset investment: multifamily commercial real estate. This is done through the DiversyFund Growth REIT (real estate investment trust).

diversyfund

This trust consists of high-potential real estate projects and properties carefully picked by a team of real estate investors. This team manages, renovates and sells them to turn a profit. These profits are then shared with the investors in the trusts, which in this case, would be your child (or possibly you.) You could consider DiversyFund if your teen isn’t 18 yet. This will allow you to navigate and get comfortable on the 24/7 access, self-serve investment platform that connects to all of DiversyFund’s unique offerings, including high value private real estate investment funds and financial educational services.

4. SET ASIDE MONEY TO GIVE

We’re teaching our kids to tithe 10% of our income, before expenses, to give to our local church. For your family this may look different. This could include giving to a charity of choice or setting apart money to pour back into the local community.

Again, this is a life skill every child should be taught.

Our communities need to be filled with more people with heart. 

Four principles.

Simple principles,

but life changing principles.

Principles that will build a strong foundation in your teen.

financial literacy quote

Financial literacy is, in a way, a gift you give your teenager.

One that she will perhaps not appreciate immediately, but over time, will recognize as wealth,

and yes, pass on to her children, years later.

 

Need more resources to help manage your finances? Click the link.

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